India’s economic fundamentals an anchor against volatility — BSE Chief

New Delhi, Feb. 24 (IANS): India’s positive macro-economic fundamentals remain a key anchor against any volatility that might flare-up in the country’s equity indices due to the upcoming general elections and current geo-political dynamics, says the top executive of the Bombay Stock Exchange (BSE).

“India’s growth story is undeniable, but the noise around it may vary from time to time. However, the growth story is here to stay for the next 40 years,” Ashishkumar Chauhan, Chief Executive Officer and Managing Director of BSE, told IANS in an exclusive interview.

“For long-term investors in a growing India, short-term volatility is not a major factor,” he said.

According to Chauhan, the current period might seem to be particularly volatile due to upcoming elections, but factors like demographic advantage guarantees sustained economic growth which will also enhance equities’ returns.

“This is a particularly volatile time for India due to the upcoming elections, geo-political issues with neighbours, the fact that both US and China are slowing down and have severe trade disputes and Brexit.”

“There are uncertainties, but they were there earlier and it is a fact that India has done better in uncertain times. It is characteristic of India, that it does well when people don’t expect it to, it bounces back.”

Besides, Chauhan feels that capital markets regulator SEBI’s proposal to fix circuit filters or price bands on futures & options (F&O) scrips will aid to curb excessive volatility.

“India has demographic advantage… and is well equipped to fully utilise the information revolution with tech savvy young population.”

Accordingly, Chauhan asserted that as India grows economically, so will the partnership formed through equities and that the asset class remains as the best performing long-term asset class.

On the growth prospects of BSE, Chauhan pointed out that BSE was now focused on growth of new products such as MF distribution and agri-based contracts.

“Revenue-wise, if you see Star MF has really done well and all the MFs have started paying (fees) back to the BSE. It will be the revenue lead going forward,” Chauhan said.

Presently, BSE operates India’s largest MF distributor platform with over 20,000 distributors. In the current fiscal, till January 31, 2019, the platform processed nearly 2.87 crore transactions amounting to INR 126 lakh crore.

It added 1.56 lakh new SIPs amounting to INR 45.98 crore last month.

“India INX is already touching $1 bn turnover daily and we don’t charge there but with the new regulator coming in and if competition allows, the platform might be another revenue earner for us,” Chauhan said.

Additionally, BSE has expanded in agri-commodities portfolio by launching cotton, Guar seed futures contract on the exchange.

“On a daily basis, we have captured 35-40 per cent business in Gaur seeds and around 35 per cent in cotton seeds. Soon, from March 2019, many online platforms will offer these BSE contracts to brokers and investors who will join our ecosystem.”

The stock exchange major has emerged as the largest market for bond distribution, IPOs, Offer to Buy, Offer to Sale and other instruments related to equities.